Chopping v. First National Bank of Lander , 1966 Wyo. LEXIS 177 ( 1966 )

Mr. Justice McINTYRE,

dissenting.

It is my understanding that the decision of the majority in this case is predicated on the proposition that there stood for trial “only the issues pertaining to reformation.” In my view this is factually incorrect

The principal defendant in this litigation is H. J. Chopping. His answer to plaintiffs complaint contained these allegations:

“1. On or about March 29, 1963, defendant, H. J. Chopping, on behalf of himself and all of the other defendants in this action agreed to convey to plaintiff, title to what is known to the defendant as ‘the lumber company property’, more particularly described on Exhibit ‘B’ attached to plaintiff’s complaint, in exchange for a complete release of all indebtedness owed by defendants to plaintiff.

“2. Plaintiff agreed to cancel all of such indebtedness in exchange for such conveyance to plaintiff of said lumber company property and plaintiff did thereupon cancel said indebtedness and delivered to defendant, H. J. Chopping, the evidence of such indebtedness, namely, a note, which plaintiff marked, ‘Paid in Full’, and thereafter plaintiff failed to release the mortgage which is Exhibit ‘C’ attached to plaintiff’s complaint.”

The pretrial conference report delineated and clarified the issues so that there could be no misunderstanding of Chopping’s defense. For example, the report shows Chopping was claiming the bank was no longer owner and holder of the note; that the note was returned and redelivered by the bank to defendant Chopping on March 29, 1963, for a valuable consideration (that consideration being the conveyance of the lumberyard property) ; and that the obligation evidenced by the note was fully compromised and settled by mutual agreement between the parties on March 29, 1963, Chopping agreeing to convey the lumberyard property to the bank and the bank agreeing to accept such conveyance in full satisfaction of Chopping’s obligation.

At the trial, Chopping’s testimony agreed with the claim made on his behalf in the pleadings and at pretrial. He testified he was called to the bank to discuss his obligations and that he talked to Floyd Lower, an officer of the bank. He said Lower wanted payment Apparently, however, since Chopping could not make payment, Lower asked for a new mortgage covering additional property which Chopping had mortgaged to a brother.

Chopping claims he told Lower he could not do what Lower was asking for, because of his brother’s interest. Instead, according to his testimony, he offered to deed the lumberyard property to the bank for the release of the gravel pit and cafe property, the bank “to give me back my note.” After some discussion between them and after Lower had thought it over, Chopping testified, Lower said: “I will take it.”

After this agreement was reached, Chopping claims Lower had the new instrument prepared, handing it to Chopping to sign. Chopping says he signed his name on that, “what I thought was a deed.” He then described in detail how Lower took his note out of the note jacket, stamped it as having been paid and handed it to Chopping, saying the bank would not bother him anymore.

He also described exactly how he folded the note, putting it in the pocket of his overalls. His testimony as to what happened to the note thereafter was that it went through the wash in his overalls and was destroyed. With respect to recording, Chopping testified Lower said he would record the new instrument and get the other one released.

According to Chopping, he heard nothing more from the bank after his transaction with Lower until a few days before the bank started suit. He claims Lower came to him at the time and said the bank officers were not satisfied with our deal and they were going to foreclose on the mortgage. When Chopping protested, saying he thought everything was settled and that Lower had given him back his note, he claims Lower merely replied that he did not come to discuss it — only to tell Chopping what was going to happen.

It is true both Chopping’s answer and the pretrial conference report contained references to the fact that defendant claimed the mortgage deed given by him to Lower should be reformed in accordance with their agreement. It is specifically provided in Rule 8(e) (2), W.R.C.P., that a party may state as many separate defenses as he has regardless of consistency and whether based on legal or on equitable grounds or both. Therefore, a pleading of a defense in reformation could not possibly take from Chopping the defense asserted to the effect-that the obligation evidenced by the note was fully compromised and settled by mutual agreement — Chopping agreeing to convey the lumberyard .property to the bank and the bank agreeing to accept such conveyance in full satisfaction of Chopping’s obligation.

In addition to the manner in which issues were settled in pretrial conference, I think we must look at the fact that the court instructed the jury with respect to the issues involved in the case, in Instruction No. 2. The instruction deals entirely with the defense I have been averring to and contains no reference to the matter of reformation. This instruction in its entirety reads as follows:

“You are instructed that in this suit the First National Bank of Lander, Wyoming, is plaintiff, and H. J. Chopping is a defendant. The plaintiff Bank seeks a judgment of $40,000.00, with interest at 7 percent per annum from October 30, 1962, amounting to $6,898.83, and attorneys fees . in the amount of $5,000.00; upon the promissory note dated October 30, 1962, and the foreclosure of the mortgage of the same date and the mortgage deed ' claimed by the Bank to have been executed and delivered as additional security on March 29, 1963.

“The defendant admits the execution and delivery of the original note and mortgage of October 30, 1962, and admits that he executed and delivered the instrument entitled Mortgage Deed of March 29, 1963, purporting to cover what has been referred to as the lumber yard property, but he asserts that the last instrument of March 29, 1963, was intended to be a deed of conveyance" of the lumber yard property in settlement of all of the indebtedness represented by the note and that he was to have the cancellation of the note and indebtedness and the release of all of the original mortgage, asserting that there was an oral agreement made between him and Mr. Lower for the plaintiff Bank agreeing to these matters.

“The Bank asserts the note was lost inadvertently, but the defendant claims that it was stamped paid and delivered to him by Mr. Lower on March 29, 1963, in pursuance of the above agreement.

“You are further instructed that the burden is on the plaintiff bank to prove its contention that the note was lost by a preponderance of the evidence, and that the burden is upon the defendant to prove the claimed agreement and cancellation of the note by a preponderance of the evidence.”

As further evidence that the case was tried on the issue indicated in Instruction No. 2, Instruction No. 5a must be noted. It submitted special interrogatories and instructed the jury to unanimously decide the answers to the specific questions. Each and all of the questions had to do with the defense I am talking about, and not a single one had to do with reformation.

It must be kept in mind that the jury not only found generally for defendants, but it answered the special interrogatories submitted to it with findings that Chopping’s note had been returned to him; that there was an agreement with Lower in substance as claimed by Chopping; and that the note had not been lost while in possession of the bank.

If the considerations I have pointed to are not enough to indicate that the case was actually tried on an issue other than reformation, then I would refer to appellee’s brief wherein the following statement is made:

“The sole issue of the trial, then, concerned whether or not an agreement as alleged by Appellant was made, and, if made, whether or not this constituted payment in full of the obligation evidenced by said promissory note.”

Without attempting to hold appellee to the statement that the “sole issue” was whether or not an agreement as alleged by appellant was made and whether this constituted payment in full of the obligation, I cannot escape the conviction that this issue was at least present, and that is sufficient to cause me to conclude that the findings of the jury should stand.

In determining whether the judgment entered pursuant to and in accordance with the verdict should have been vacated with judgment being entered for plaintiff notwithstanding the verdict, we should of course, according to appellate procedures, consider only the evidence favorable to Chopping and disregard the evidence favorable to the bank. For this reason I am not attempting to review testimony offered on behalf of plaintiff — but only to see whether there was substantial evidence to support findings of the jury.

Appellee’s attorneys, in argument on appeal, have admitted the “issue is complicated” by the fact that the original promissory note could not be produced at the time of trial. They have pointed to testimony and evidence, in support of their contention, tending to show the bank did not know the whereabouts of the original note; that it was missing from the bank files; but that it had been in possession of the bank subsequent to March 29, 1963, when the transaction between Lower and Chopping took place.

This argument overlooks the fact that the jury had a right to believe and accept the testimony of Chopping and to disbelieve that offered on behalf of the bank. No doubt that is why, at the time of trial, the trial judge rejected a motion for a directed verdict in favor of plaintiff, saying:

“There is a sharp conflict in the evidence. If the Defendant is to be believed there was an agreement between the Defendant and the loan officer of the bank to settle the litigation for a conveyance of the lumberyard property — that is his testimony. I have no right to reform a matter by directed Verdict where there is a dispute in the evidence.”

In particular, the judge held it would be invading the province of the jury for him to say the truth and veracity of any particular witness had beeu impeached; and it is unthinkable that the court should undertake to resolve a factual dispute where there is evidence which he believes might warrant a contrary conclusion.

This line of reasoning is' correct and unimpeachable. I confess I háve had difficulty in trying to understand why the judge subsequently reversed himself and did what he had declared he could not do. I think his original holding on plaintiff’s motion for a directed verdict was correct.

The express issue submitted to the jury was whether or not there was an agreement between Lower and Chopping to the effect that the instrument was delivered and accepted in full payment and satisfaction of the mortgage debt. It hardly makes for justice understandable to the public, if courts can submit such definite and positive questions to the jury as were submitted in this case, and afterwards take the position that it doesn’t matter anyhow. The specific findings of the jury in this case were so factual that they should be conclusive on the court, regardless of whether we consider the case one in law or in equity.